Prime Minister Hun Sen yesterday urged garment workers to improve their productivity in order to prevent factories from closing shop and moving to such countries as Laos, Bangladesh and Myanmar, all of which have lower minimum wages.
His comments came during a graduation ceremony at the National Technical Training Institute, where he also pointed out relatively rapid gains in the minimum wage for Cambodia’s garment workers, which was recently set at $153 a month for the coming year.
“The countries that are absorbing the factories from us are Myanmar, with a minimum wage of $60 to $80; Laos, with [a minimum wage] of $100; and Bangladesh, [with a minimum wage] of $100,” he said. “The factories might pass our country.”
Miguel Chanco, lead ASEAN analyst for the Economist Intelligence Unit, yesterday agreed that countries such as Myanmar and Bangladesh “present a real threat to Cambodia’s garment industry, primarily because of how much more expensive it is to hire workers in Cambodia”.
“The steep increases seen in the minimum wage of Cambodia’s garment industry since 2013 pretty much mean that it now costs twice as much to hire someone in Cambodia – when compared with labour costs in Myanmar and Bangladesh – which is critical given the labour-intensive nature of the industry,” he said via email.
Garment Manufacturers Association in Cambodia deputy secretary-general Kaing Manika said it was impossible to deny the threat posed by Myanmar and Bangladesh.
“Want it or not, [they] have joined the list of Cambodia’s competitors,” he said in an email. “It’s not a threat, but a requirement for Cambodia to perform better.”
But William Conklin, country director for the Solidarity Center, said the situation was more complicated than simply demanding that employees work harder. “For production to increase, it’s the employer that needs to take the first step by providing a decent work environment for workers,” he said.
“There’s a role for all players . . . to really come together and try to help preserve and develop the sector.”
Pav Sina, president of the Collective Union of Movement of Workers, meanwhile, said the wage issue was not to blame for factories shuttering. He points to rather long-standing complaints about bribery, infrastructure woes and non-competitive electricity prices.
“What is important for some investors is the high transportation fees and the electricity prices, which are higher than in other countries,” he said.